The update will change how the signal appears, it won't affect the strength. It evens out the points at which each bar is shown so there isn't such a large span of signal differences.
All iPhones used the previous algorithm so they will also change how they show the bars with the new update.
This shows the points at which the previous bars are shown vs the new:
[attachment=1914:iPhoneSignal_both.jpg]
Here is a comparison among two iPhones and an Androd:
[attachment=1915:signalbarmapping.jpg]
According the the article:
QUOTE
The result is that most iPhone users will see fewer bars disappear when they hold the iPhone 4 in a bare hand. The side effect is that the iPhone now displays fewer bars in most places, and users that haven’t been reporting signal in dBm will time see the - perhaps a bit shocking - reality of locations previously denoted as having excellent signal.
With 4.0.1 users looking at signal bars will get a much more realistic view of how signal is changing.
We tested the iOS 4.1 beta on iPhone 3GSes as well, and found the mappings to be the same there as well.
